read - IPPro The Internet

TUESDAY
ISSUE028
29.10.2013
ipprotheinternet.com
Movie studios scrap
BitTorrent tracker
BitTorrent tracker isoHunt.com closed on
23 October after the website’s owner settled with major US movies studios in their
long-running copyright infringement case.
The site’s owner, Gary Fung, agreed to
close the website, which claims to offer 44.2 million peers and 13.7 million
active torrents, and pay $110 million in
damages to Disney, Twentieth Century
Fox, Universal and Warner Brothers,
as well as Columbia, Paramount and
Tristar Pictures.
The Motion Picture Association of
America (MPAA) represented the studios in the case.
And so it begins: ICANN delegates
new generic top-level domains
Four new gTLDs have been delegated into the
root zone of the domain name system, marking
the first implementation of the Internet Corporation for Assigned Names and Numbers’s (ICANN)
historic programme.
International Domain Registry will oversee the Arabic word for ‘web/network’ (‫)ةكبش‬, Spring Fields is
in charge of the Chinese word for ‘game(s)’, while
CORE Association will take care of the Cyrillic words
for ‘online’ and ‘site’ (онлайн and сайт, respectively).
In a blog post, Akram Atallah, president of ICANN’s
generic domains division, hailed the introduction of
the new gTLDs as the “dawn of a new internet era”.
“It’s no accident that the first tranche of gTLDs to
be delegated are all non-Latin strings—or as we
officially refer to them, internationalised domain
name (IDN) gTLDs.”
“In addition to facilitating competition and innovation through the new gTLD programme, one of
ICANN’s key aims is to help create a globally inclusive Internet, regardless of language or region. For
this reason, we elected to prioritise the processing
of IDN applications and their delegation.”
Atallah added that ICANN expects to delegate more
gTLDs in the coming months and through 2014.
Each registry can now launch the sunrise periods
for their gTLDs, allowing trademark owners to begin
requesting their rights as second-level domains.
Sunrise periods must last for no less than 30 days,
after which gTLDs will become generally available.
The Trademark Clearinghouse (TMCH) is thought to be
integral to ICANN’s rights protection mechanisms for new
readmore p2
The movie studios accused Fung and
his company isoHunt Web Technologies of copyright infringement in 2006
in New York. The case was later moved
to Los Angeles, where in 2009 a judge
found “defendants’ intent to induce infringement [to be] overwhelming and
beyond reasonable dispute”.
readmore p2
Twitter’s patents do not
pack a punch
Twitter’s initial public offering has raised
concerns about the micro blogging
website’s lack of a solid patent portfolio,
which the company says leaves it open
to infringement.
It filed its Form S-1 with the US Securities and Exchange Commission on 3
October, ahead of floating on the New
York Stock Exchange, a move that it
hopes will raise more than $1 billion.
A Form S-1 must be filed with the securities regulator and contain key information from which potential investors can
make educated investment decisions.
readmore p2
NewsInBrief
And so it begins: ICANN delegates
new generic top-level domains
Continued from page 1
gTLDs, as it enables brands to support
trademark claims and participate in multiple
sunrise periods.
It holds a database of verified registered
word marks and all new gTLD registries
and registrars are required to use it to
support pre-launch or initial launch period
rights protection mechanisms.
said that the Digital Millennium Copyright Act
safe harbour exemptions did not protect Fung
and his company because the movie studios’
content “was sufficiently current and well-known
that it would have been objectively obvious to
a reasonable person that the material solicited
and assisted was both copyrighted and not licensed to random members of the public, and
that the induced use was therefore infringing”.
IPProINBRIEF
Fung and his company also profited from the
infringement through advertising while having
the “right and ability to control” infringing activity
occurring through isoHunt.com.
Jan Corstens, project director at the TMCH,
and a partner at Deloitte, which is overseeing the clearinghouse, said that “the issue of
cybersquatting and related domain name disputes is likely to be exacerbated following [this]
shakeup of the internet”.
A pretrial hearing on damages was scheduled
for 5 November, in which Fung and his company could have been forced to pay $150,000 for
each of the thousands of works willfully infringed
through isoHunt.com, but it will not go ahead.
“Failing to record marks into the TMCH and being unaware of those who intend to abuse your
trademark, in order to market imitation goods
or services, can have serious consequences.”
The parties have instead asked the district court
to enter a $110 million judgement against the
defendants, with Fung agreeing to not profit
from the movie studios’ content in the future.
ICANN launched its new gTLD programme in
January 2012 to open up domain name endings, which were limited to terms such as .com
and .net, to almost any word.
MPAA chairman and CEO Chris Dodd, who is
also a US senator, hailed the settlement as a
major step forward in realising the enormous
potential of the internet as a platform for legitimate commerce and innovation.
Latest news
“It also sends a strong message that those who
build businesses around encouraging, enabling,
and helping others to commit copyright infringement are themselves infringers, and will be held
accountable for their illegal actions.”
Latest news
Almost 2000 applications for new gTLDs were
submitted, and brands such as technology giants
Google and Apple were among the applicants.
Brands watching from the sidelines must wait
for the as-yet unannounced second round of
applications if they want their own gTLDs.
Roland LaPlante, chief marketing officer at
Afilias, the domain name registry operations
company behind .info and .mobi, said: “Businesses that already applied (including major
brands ranging from Google to Amazon) are
now building plans for integrating their new
gTLD into their online strategies and communicating the benefits to consumers.”
“Business that have not applied must seriously
consider both the imminent competitive impact
and how to best prepare to apply for their own
gTLD in ICANN’s next round.”
Movie studios scrap
BitTorrent tracker
Continued from page 1
The judge issued an injunction barring Fung from
hosting, indexing, linking to, or otherwise providing access to MPAA members’ copyrighted
works then in existence or created in the future.
On appeal, the US Court of Appeals for the
Ninth Circuit affirmed the lower court’s inducement finding, confirming that Fung and his
company had taken “no steps to develop filtering tools or other mechanisms to diminish the
infringing activity by those using [isoHunt.com]”.
The Ninth Circuit’s March 2013 decision also
Latest news
US ITC to review a ruling that Funai Electric infringed a patent covering internetconnected home entertainment products
p4
Icelandic copyright advocates request
an injunction to block access to two websites they believe enable infringement
p6
Judge Hearst blocks the latest attempt to shut down Aereo, a site
many say illegally reproduces TV
broadcasts online
p8
He added: “Consumers today have more options than ever before to legally access movies
and TV shows on the internet—from Hulu to
HBO Go to Vudu to Crackle to UltraViolet and
literally hundreds of others.”
“Clearing the field of illegal services like isoHunt
will help ensure that these legitimate services
can grow and thrive, and that consumers have
even more choices.”
In a blog post, Fung said: “I have fought the
good fight, I have finished the race and I have
remained faithful.”
Twitter’s patents do not pack
a punch
Patent trolls
Twitter earned approximately $317 million in
revenue last year, but continued to make a net
loss, although that declined 38 percent to about
$79 million.
Sunrise time
Continued from page 1
Three-quarters of users of the micro blogging
site access it through mobile devices, according
to the filing. Twitter has more than 215 million
monthly active users.
The micro blogging site went on to discuss intellectual property protection, explaining that as
2
The beast of many names and causer of
much controversy has made some powerful enemies in the US
p9
There no more time to prepare, because new gTLDs are here.
p12
People moves
Colleen Chien joins the office of the
chief technology officer, Locke Lord
bags an IP litigator, and more
p13
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NewsInBrief
of 30 June, it had six US patents and approxi- “In such event, we may be limited in our ability to
mately 80 patent applications on file in the US assert a patent right against another company,
and abroad.
and instead would need to rely on trade secret
protection or the contractual obligation of the in“[T]here can be no assurance that these appli- ventor to us not to disclose or use our confidencations will be ultimately issued as patents. We tial information. In addition, the terms of the IPA
may be unable to obtain patent or trademark could affect our ability to monetise our intellectual
protection for our technologies and brands, and property portfolio.”
our existing patents and trademarks, and any
patents or trademarks that may be issued in Twitter also warned in the filing that its brand
the future, may not provide us with competitive faces significant threats, with it worried about
advantages or distinguish our products and ser- third-party use, which its brand protection team
vices from those of our competitors.”
regularly addresses, and the risk that one or
more of its trademarks could become generic.
“Our Innovator’s Patent Agreement, or IPA, also
limits our ability to prevent infringement of our “For example, there is a risk that the word
patents,” it explained in the filing.
‘Tweet’ could become so commonly used
that it becomes synonymous with any short
The IPA was introduced in May.
comment posted publicly on the internet, and
if this happens, we could lose protection of
Previously described as “a new way to do this trademark.”
patent assignment that keeps control in the
hands of engineers and designers”, Twitter Twitter plans to sell 70 million shares for bepromises to its employees through the IPA tween $17 and $20 each, potentially raising up
that it will only use its rights to their inventions to $1.5 billion.
for defensive purposes.
In its regulatory filing, Twitter indicated that the
IPA limits its ability to assert its patents. “For example, in the event that an inventor of one of our
patents leaves us for another company and uses
our patented technology to compete with us, we
would not be able to assert that patent against
such other company unless the assertion of the
patent right is for a defensive purpose.”
US ITC to review Funai patent
infringement ruling
2012 after LSI Corporation and Agere Systems
filed a complaint against Funai.
The complaint alleged that Funai infringed four of
LSI’s patents, violating Section 337 of the Tariff Act
of 1930. LSI accused Funai of using its technology
to make a long list of products ranging from digital
televisions to Blu-ray disc players sold under Sylvania, Magnavox and other brands.
In July, administrative law Judge David Shaw
found that Funai infringed one non-essential
patent (5870087) but did not infringe three
essential ones.
Judge Shaw issued a ruling that found violation
of Section 337, with certain audio-visual components and products infringing four claims in the
single patent.
He also found that the asserted patents were
valid, and that the respondents were not eligible for any equitable or reasonable and nondiscriminatory (RAND) defence.
Funai has now filed a petition for review, urging the ITC to reverse the ruling and alleging
that Judge Shaw incorrectly defined three of
the claim terms in the patent—”single memory,”
“memory” and “first unified memory”.
The US International Trade Commission (ITC)
will review a ruling that Funai Electric infringed The ITC said it would pay particular attention to
a patent covering internet-connected home en- LSI’s promise to license its standard-essential
patents on RAND terms.
tertainment products.
The ITC commenced an investigation in April The ITC is targeting 9 December for a decision.
4
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NewsInBrief
Copyright groups ask for
website injunction
“The action is not intended to go against freedom have legal grounds and a commercial interest in
of expression but to prevent infringement, and doing so”, according to the UK IPO.
protect intellectual property rights and the liveli“The reduction in complexity of the procedure is
hoods of authors, performers and producers.”
Icelandic copyright advocates have requested
to be welcomed, as is the UK IPO’s commitment
an injunction to block access to two websites
to delivering decisions quickly,” said Mark CadUK
IPO
introduces
opposition
they believe enable copyright infringement in
dle, associate of Withers & Rogers.
the country.
procedure for trademarks
Christiana Loizides also sees this as a positive imThe group, which includes the Performing The UK Intellectual Property Office (IPO) intro- plementation, “This is good news for small or meRights Society of Iceland, wants internet service duced a new fast-track opposition procedure for dium businesses and individuals who may have
providers to block access to The Pirate Bay, trademarks on 1 October.
been previously deterred from formally opposing
through thepiratebay.sx, and Deildu.net, the
third party applications due to the costs involved.
largest private BitTorrent tracker in Iceland.
The UK IPO will reduce costs, whereby owners
of existing trademark registrations can defend “The UK IPO is taking positive steps to encourCopyright groups have successfully forced their rights against later-filed UK applications by age trademark owners to protect the value of
ISPs to block access to copyright infringing third parties to register conflicting marks.
their brand through this fast track procedure.”
websites throughout the EU, including in the
UK, where EZTV and YIFY Torrents, The The new trademark fast track opposition, which
EU to force Samsung to end
Pirate Bay, KickassTorrents, H33T, Fenopy, acts, as an alternative to the existing opposiMovie2K, First Row Sports and Download- tion framework will simplify the process. The patent wars
4All have all been blocked.
procedure also requires opponents to provide
substantial evidence when filing the opposition. ‘No more patent wars’ is the notion that SamThe injunction is a last resort for the Ice- If you want to file additional evidence, you would sung said in a statement to the European
landic group, as it has already sought the need to seek the permission of the UK IPO.
Commission in a bid to avoid a massive fine.
help of the police and conducted public
awareness campaigns about the damages According to the UK IPO, the fast track will pro- The EU Commission has asked for comments
of copyright infringement.
vide a “faster, cheaper and less complicated on a proposed deal with Samsung, which will
way” for brand owners to protect their trade- see the electronic maker barred from suing riIn a statement, the group said: “Blocking ac- marks. The official fee for a fast-track opposition vals over infringement of its standard-essential
cess to websites that offer access to media will be £100, reduced from £200.
patents for the next five years.
without the permission of copyright holders
is an action that has been successfully tak- The goal of the new procedure is to “assist busi- Concerns have been raised as Samsung faces
en in neighbouring countries and has strong ness, specifically SMEs, to defend their trade a huge fine for alleged abuses of the patent
marks before the IPO where they believe they system by the EU commission.
foundations in EU law.”
Salih El Amin Intellectual Property
International Trademark & Patent Attorneys
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INTELLECTUAL PROPERTY
Your link to trademark & patent registration
in Dubai (U.A.E), GCC, Middle East, Africa,
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Tel.: +971-4-286-8869 Mobile: +971-50-450-3212
Fax: +971-4-286-8893 P.O. Box 30888, Dubai, U.A.E
[email protected] www.saips.org / www.salihelamin.com
6
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NewsInBrief
The EU said that the decision would help bring Michael Froman said: “After carefully weighclarity to the industry.
ing policy considerations, including the impact on consumers and competition, advice
“Samsung has offered to abstain from seeking from agencies, and information from interinjunctions for mobile standard essential pat- ested parties, I have decided to allow [the
ents (SEPs) for a period of five years against import ban to proceed].”
any company that agrees to a particular licensing framework,” the European Commission said The South Korean company argued the ban
in a statement.
should be overturned on public policy grounds,
particularly as a ban on Apple’s iPhone 4S was
The EU had accused Samsung of repressing overturned by a presidential veto in August.
competition by bringing a series of SEP lawsuits
against Apple and other competitors.
The US Trade Representative vetoed the ITC’s
iPhone 4S ban on 3 August.
The SEPs cover core technologies for mobile
devices that must be shared on reasonable The ITC made its decision to block imports
terms. The EU took action after Samsung sued of the products on 4 June, after finding
Apple in the UK, Germany, France, Italy, and that they infringed Samsung patents for 3G
the Netherlands.
wireless technologies.
But easyDNS refused to suspend TorrentPond’s domain, describing the police request
as overbroad and unfounded as there is no hint
of due process.
It’s not only Samsung that has been accused
of anti-competitive practice. Google’s Motorola
Mobility has also been charged with the offence.
Judge denies Hearst request
to shutdown Aereo
UK IP Crime Unit targets
domain registrars
Samsung faced a $17.3 billion fine it was found The UK Intellectual Property Police Division of
guilty of violating competition laws.
the Intellectual Property crime unit’s demands
to suspend domain names were recently re“Enforcing patents through injunctions can be fused by the registrar, easyDNS.
perfectly legitimate,” said Joaquin Almunia,
the European Commission’s vice president in The registrar said that the claims from the
charge of competition policy.
newly founded IP Crime Unit were an abuse
of power and that the division is acting without
Samsung and Apple currently have a number legal consent.
of infringement cases pending in more than 10
countries across Europe.
The IP Crime Unit started issuing urgent demands earlier in this month. Two websites,
In August, the US International Trade Com- SumoTorrent and MisterTorrent, lost their domission banned a range of Samsung devices mains after the police sent them warnings that
from being imported into the US after ruling the sites were violating copyright law and the
that they make unauthorised use of rival Ap- UK Serious Crime Act.
ple’s intellectual property.
The IP Crime Unit sent letters that were strongThe EU Commission has now formally ly worded and demanded immediate action
opened the proposals up for comment from from registrars.
interested parties.
The letter stated: “The owners of the aforemenPresident Obama upholds ban tioned domains are suspected to be involved
in the criminal distribution of copyrighted maon Samsung devices
terial either directly or indirectly and are liable
The Obama administration has upheld a ban to prosecution under UK law for the following
on the import of certain Samsung devices into offences: Conspiracy to Defraud, Offences under the Fraud Act 2006, Copyright, Design &
the US.
Patents Act 1988.”
“Since there were no charges against any of
the domains and no court orders, it may be at
the registrars’ discretion to play ball with these
ridiculous demands,” said easyDNS CEO Mark
Jeftovic in a blog post.
“I cannot possibly imagine who else should
be the final arbiters of that. An AUP and ToS
is an agreement between the customer and
the service provider. It is not a mechanism
for third parties to shoehorn their whims into
somebody else’s affairs. If you want to do that,
get a court order.”
Hearst Stations has failed in its attempt to
prohibit online TV service Aereo from reproducing its broadcasts.
Hearst filed the copyright infringement lawsuit at the US District Court for the District
of Massachusetts in July.
It accused Aereo of violating its copyrighted-programmes by capturing signals
and reproducing them for its customers
without permission.
“Hearst has not demonstrated a sufficient
likelihood of success on the merits nor the
requisite irreparable harm” for an injunction,
district Judge Nathaniel Gorton said in his 8
October decision.
In his decision, Judge Gorton stated: “After
considering the relevant factors, the court
finds that a preliminary injunction is unwarranted. Hearst has not demonstrated a sufficient likelihood of success on the merits nor
the requisite irreparable harm and therefore
it is not entitled to that extraordinary and
drastic remedy.’”
Aereo faces other requests for injunctions from TV networks including Fox
“Should a conviction be brought for the above and CBS Utah affiliates KSTU-TV, KUTVoffences, UK courts may impose sentences of TV and KMYU that that could potentially
imprisonment and/or fines. PIPCU has criminal shut it down.
and civil powers in UK law to seize money, belongings and any property in connection with They jointly filed a copyright infringement
complaint against Aereo in the US District
The ban is not expected to affect Samsung’s these offences.”
Court for the District of Utah on 7 October.
sales in the US, as the covered devices, including the Captivate, Continuum, and Fas- The police also requested that traffic from these
torrent sites be redirected to a website hosting “Today’s decision, coupled with the decisions
cinate, are now obsolete.
the City of London Police logo, as well as the in favour of Aereo in the Southern District
of New York (11 July 2013) and the Second
In its decision, the ITC said newer models logos of their entertainment industry partners.
Circuit Court of Appeals (1 April 2013 and
had bypassed Apple’s asserted patents covering a multi-touch feature and a headphone “We request that the aforementioned domain(s) 16 July 2013), shows that when you comply
are redirected to the PIPCU Warning Page lo- not only with the letter, but the spirit of the
jacks sensor.
cated at IP address: 83.138.166.114,” stated law, justice will prevail,” said Aereo CEO and
founder Chet Kanojia in a statement.
Upholding the ban, US trade representative the letter.
The US International Trade Commission (ITC)
issued an injunction against Samsung in August over infringement of Apple’s touchscreen
patent and another relating to a headphone
jacks sensor.
8
www.ipprotheinternet.com
TrollControversy
Patent trolls: a bridge too far?
Call them what you like, but they do make for good reading. IPPro investigates
the accusations and initiatives being levelled at non-practicing entities
MARK DUGDALE REPORTS
A troll lives under a bridge, spending its time
eating whoever crosses, except, as the tales
tell, goats. It also reportedly lives in a cave,
and can be described as a dwarf or a giant. In
modern parlance, a troll spends his or her time
plaguing internet forums with insults in a bid to
upset users and get a reaction. The modern-day
troll also targets ‘the little guy’, presumably because it is bigger and it can.
The multiple applications of ‘troll’, while varied
in their realism, are consistent in their negativity.
‘Patent trolls’, more respectfully known as nonpracticing entities (NPEs), are litigious beasts
that amass portfolios of unproven patents and
enforce them against all and sundry, usually
those who cannot afford to prove invalidity and
find it easier to settle.
is unreliable in its scope. Indeed, a number of
speakers at the recent London Patent Summit
bemoaned the use of the PAE label, arguing
that it describes almost any entity that enforces
a patent.
is supposed to work. We propose something
much simpler: ‘patent holder’. That’s all that really matters, and puts the focus where it should
be—on the patent itself. There isn’t a need to
categorise the holder beyond that.”
Intellectual Ventures, a holder of 70,000 intellectual property assets, of which nearly 40,000
are actively being monetised, earning the company $3 billion in cumulative licensing revenue,
is largely considered to be an NPE.
Political pursuit
But the company’s co-founder and vice chairman, Peter Detkin, takes issue with both the
“patent troll” and NPE labels. He says: “As the
political fight heats up the word ‘troll’ has been
stretched to the point where it has almost no
meaning and where legitimate market players
are being swept in with the bad actors.”
These entities are considered to be the worst
form of NPE, and are commonly referred to “And the polite term for ‘patent troll’, non-pracas patent assertion entities (PAEs), although ticing entity, is misleading and reflects a serious
not here where possible, as that description misunderstanding of how the patent system
9
Whatever the description, the patent troll
scourge—hyperbolic, but read on—has
prompted a backlash in the US. In fact, it is
such a contentious issue that President Barack
Obama has waded into the fray. At the Fireside
Hangout in February 2012, he said: “[PAEs]
don’t actually produce anything themselves.
They’re just trying to essentially leverage and
hijack somebody else’s idea and see if they
can extort some money out of them.”
The White House issued a report into the behaviour of these entities a year later, on 4 June
2013. It also issued executive actions that the
Obama administration is taking, and legislative
www.ipprotheinternet.com
TrollControversy
measures that it is asking US Congress to pass to carve out other entities, and the more you
to protect American innovators.
start doing that, the more you dive down into
a rabbit hole that legislators are ill equipped to
The issued report details the extent of the prob- deal with.”
lem in the US, with estimates putting the cost of
NPE settlements at $29 billion in 2011, a 400 “I’m very concerned because I have a great fear
that legislators using a tool that is terribly ill-suitpercent increase from 2005.
ed to this issue will wind up trying to use a bomb
The result, said Gene Sperling, director of the instead of a scalpel.”
national economic council and assistant to the
president for economic policy, is “costing the An example of new legislation aimed at adeconomy billions of dollars and undermining dressing abusive patent litigation came on 23
October, in the form of a US House Judiciary
American innovation”.
Committee bill. The bipartisan Innovation Act
In his blog post, he added: “Today, some of “builds on the reforms that were made last Conthe largest innovators in high-tech spend more gress in the America Invents Act and addresses
money on patent litigation and acquisition than certain abusive practices taking place in our
they do on research and development for new courts”, according to a statement.
products. Smaller companies are getting hit just
as hard, and 40 percent of technology startups The bill primarily aims to target abusive patent
targeted by patent trolls reported a significant litigation, which its political backers stressed
impact on their business operations due the suit will tackle behaviour rather than individuals. It
will not “diminish or devalue patent rights in any
or threat thereof.”
way”, while introducing heightened pleading
“It’s clear that the abuse of the patent system standards and transparency provisions, and a
is stifling innovation and putting a drag on our modernised version of fee shifting.
economy. The trolling has gotten out of control,
and it’s time to act.”
House Judiciary Committee Chairman Bob
Goodlatte said: “The bipartisan Innovation Act is
Trolling is the verb
designed to eliminate the abuses of our patent
system, discourage frivolous patent litigation
Among the steps that the Obama administration and keep US patent laws up to date. These
wants to take will require patentees and appli- important actions will help fuel the engine of
cants to disclose the ‘real party in interest’.
American innovation and creativity, creating
new jobs and growing our economy.”
“[It requires] any party sending demand letters,
filing an infringement suit or seeking [patent of- The Intellectual Ventures statement in June
fice] review of a patent to file updated ownership went on to discuss legislative initiatives that
information, and enabling the [patent office] or had already put in place, namely the America
district courts to impose sanctions for non-com- Invents Act (AIA).
pliance”, said a White House statement.
“Intellectual Ventures supports improvements to
Commenting in June on the ‘real party in interest’ the patent system, and we supported the presiadministrative action, an Intellectual Ventures dent when he introduced the American Invents
statement said: “[The company] believes ‘real Act in 2011. The AIA received broad, bipartisan
party in interest’ proposals are misguided and support and represents an ambitious overhaul
merit further discussion, but we will of course to the current patent system.”
comply with whatever regulations are enacted.”
“Although we appreciate some of the presiBrian O’Shaughnessy, shareholder at the dent’s current proposals and believe they could
IP Law firm RatnerPrestia and regional vice help alleviate some of the issues that persist in
president of the US at the Licensing Execu- the current patent system, Intellectual Ventures
tive Society USA & Canada, where it is his would encourage lawmakers to continue pursujob to act as public policy coordinator for ing the bold changes set forth as part of the AIA
statements that the society wishes to make since they have yet to be fully adopted.”
on US legislative initiatives, points back to
comments made by US Supreme Court Jus- Two aspects of the AIA specifically sought to extice Potter Stewart when he was faced with amine and address NPE litigation. Article 34 of
a case covering pornography. He tried to the act, which came into effect in March, obliged
define ‘obscenity’, but in frustration acknowl- the US Government Accountability Office to
edged that it defied definition. Instead, he assess the consequences of patent litigation
said he would know it when he saw it.
brought by NPEs.
“The same parallel applies here,” explains
O’Shaughnessy. “Troll behaviour is something
that defies definition. You cannot call someone
a troll without having to write more exceptions
into the rule that consume the rule itself. Once
you start writing exceptions, then you invite
gamesmanship. We can try to carve out universities and government labs, but then you have
to explain this increase, the report noted that
increasing numbers of “patent trolls” might have
played a part.
It stated: “Stakeholders knowledgeable in patent litigation identified three key factors that
likely contributed to many recent patent infringement lawsuits. First, several stakeholders [the
office] interviewed said that many such lawsuits
are related to the prevalence of patents with
unclear property rights; for example, several of
these stakeholders noted that software-related
patents often had overly broad or unclear claims
or both.”
“Second, some stakeholders said that the potential for large monetary awards from the
courts, even for ideas that make only small contributions to a product, can be an incentive for
patent owners to file infringement lawsuits.”
“Third, several stakeholders said that the recognition by companies that patents are a more valuable
asset than once assumed may have contributed
to recent patent infringement lawsuits.”
Section 19 of the AIA, already in effect, prohibits defendants from being joined in a suit unless
there are questions of fact common to all of
them. “The AIA had a rather notable effect on
patent cases, in that it is now very difficult to
name more than one defendant in a lawsuit,”
says O’Shaughnessy.
The high bar for naming defendants in patent suits
might also have affected the studies on NPE litigation carried out since its implementation.
O’Shaughnessy says: “Each defendant has to
be named in an individual lawsuit. A troll might
have brought a lawsuit against 15 different defendants a year ago, but today it’s 15 lawsuits.
Consequently, that can be exploited to make it
look like the number of lawsuits have increased
dramatically due to troll activity, when the
real fact of the matter is that litigation has not
changed, merely the number of lawsuits.”
He adds that the premise behind legislative initiatives, and the studies used to support them,
“is flawed—that NPE litigation is somehow
crushing our judicial system”.
“In fact, when measured relative to the number of patents issued, the data show that the
number of patent lawsuits today is below
historic highs, and has remained steady for
many decades.”
Unwanted attention
Another US agency taking an interest in
The office released its report in August, finding NPEs is the Federal Trade Commission
that NPEs are responsible for around 20 per- (FTC), which recently voted to seek public
cent of patent litigation in the US.
comments on a proposal to gather information from 25 companies that could make the
The report described that, after fluctuating only NPE picture all the clearer.
slightly between 2000 and 2010, the number
of patent infringement suits brought in the US In 2012, the anti-trust division of the Departincreased by about a third in 2011. Attempting ment of Justice along with the FTC sponsored
10
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TrollControversy
a workshop to explore the impact of NPE activity on innovation and competition.
While workshop participants and commenters identified the potential damage that
NPEs could cause, they noted that there was
insufficient empirical data in the field and
recommended that the FTC use its authority under Section 6(b) of the Federal Trade
Commission Act—“effectively giving it a data
generation authority by way of subpoena,”
explains O’Shaughnessy.
“Patents are key to innovation and competition,
so it’s important for us to get a better understanding of how PAEs operate,” said FTC chairperson Edith Ramirez.
“We want to use our 6(b) authority to expand
the empirical picture on the costs and benefits
of PAE activity. What we learn will support informed policy decisions.”
Previous studies have focused mainly on publicly available litigation data and concluded
that NPE litigation is increasing. The FTC has
congressional power to gather non-public data,
such as licensing agreements, and patent acquisition, cost and revenue information that will
provide a clearer view of NPE activity.
The FTC hopes to answer questions that stem
directly from the debate surrounding NPEs, including how they are structured, and how much
they earn through patent assertion. After public
consultation, the FTC will submit a request to
the Office of Management and Budget to comply with the Paperwork Reduction Act, seeking
clearance for its proposal to send compulsory
process issues to NPEs.
The NPE originally accused 55 defendants of
patent infringement, but they have all settled
with Lodsys since it was filed in the US District
Court for the Eastern District of Texas, except
Kaspersky Lab.
licence would provide crucial guidance to millions of app developers”.
This left the patent exhaustion question unanswered, much to the annoyance of the ElectronIn the meantime, the patent troll problem is ic Frontier Foundation, which filed an amicus
ongoing, as highlighted by Lodsys, which did brief asking the court to rule on the merits of
not respond to a request for comment. It re- the licence issue, because a ruling on “whether
cently agreed to settle with IT security company or not Lodsys’s claims against iOS-based app
Kaspersky Lab for nothing.
developers are barred or exhausted by Apple’s
The patent troll problem, however large, damaging and costly, is a reality, according to many.
But before a solution must come understanding,
and the fact that the problem has at least four
different names—NPE, PAE, patent troll and
patent holder—suggests that this is some way
off. IPPro
Russ Merbeth, chief policy counsel at Intellectual Ventures, welcomes the FTC’s attention.
He says: “The market for patents has grown
tremendously in the last decade, and it makes
sense that its impact on the US economy is being studied by the competition and consumer
protection authorities at the FTC. We believe
the FTC analysis would help policymakers
make decisions on patent reform based on business behaviours, not business models.
O’Shaughnessy comments: “By opening up
such an enquiry, they can engage entities that
are involved in IP acquisition, licensing, enforcement, or whatever, and demand otherwise confidential information.”
But he cautions: “This is going to be a long-term
process—the FTC won’t send out requests for
information for at least a year, because there is
a lot left to be done before it can.”
If an accused infringer chooses to go to court
rather than settle with what it thinks is a true
‘troll’ that is bringing an arguably bogus case,
Lodsys agreed “a full and unconditional ca- the trial judge has tools available that can help.
pitulation” ahead of the case going to trial on 7
October, according to Eugene Kaspersky, chief
O’Shaughnessy says: “The judge already has
executive of Kaspersky Lab, with his company
the ability to sanction abuse of conduct in the
having to pay nothing to settle the litigation.
context of litigation. That is available through
a couple of mechanisms, most notably Rule
Similarly, Lodsys accused seven developers of
11 of the Federal Rules of Civil Procedure. It
infringing two patents in May 2011 by using iOSobligates a litigant to do reasonable due dilibased in-app purchasing technology, and later
gence before bringing a lawsuit. If that isn’t
added another four to its complaint.
done, and the litigant perpetuates the lawsuit,
the judge can issue sanctions. They can range
Apple intervened in the case, arguing that an
from monetary fines to dismissing the case
existing licence agreement between it and Lodwith prejudice.”
sys rendered the asserted patents exhausted in
this case and so the developers were protected
He adds: “Judges traditionally don’t use that
from liability.
vehicle because of a fear that an overuse of
But all of the developers settled, and US Dis- Rule 11 sanctions would chill access to the
trict Court for the Eastern District of Texas court system. But I think the kind of legislation
Judge Rodney Gilstrap granted Lodsys’s mo- that is being proposed is potentially far more
tion to dismiss Apple from its case against on dangerous than a more aggressive use of Rule
11 might foster.”
24 September.
Sleepless in settling
11
www.ipprotheinternet.com
gTLDUpdate
Here come the sunrise
There is no more time to prepare. New gTLDs are here. IPPro takes a
look at the tools that trademark owners must use to protect their brands
MARK DUGDALE REPORTS
The sunrise periods for the first new gTLDs
are underway. Donuts, the registry that applied for more than 300 gTLDs during the first
round of the Internet Corporation for Assigned
Names and Numbers’s (ICANN) revolutionary internet naming programme, launched the
sunrise periods for nine new domain name
endings on 29 October.
Ben Anderson, head of new gTLDs at NetNames, commented: “Last minute changes
have delayed the rollout of gTLDs but there
now appears to be a clear path forward and
the launch of new domain suffixes will dramatically alter how brands approach their online
strategies. New domain endings will enable
brands to strengthen their online presence by
developing a personalised web presence that
reflects their target market.”
“As new gTLDs enter the market, it will only
take one organisation with a strong digital
presence and enough consumer influence, to
take the lead and demonstrate their potential.
With 73 applications in the pipeline, Amazon
is currently the front-runner to adopt this role
and many of the biggest brands, including
Barclays, Philips, Apple and Boots, are already engaged in the so-called ‘land-grab’ for
new domain names.”
Trademark owners can now secure their
brands as second-level domain names in
the gTLDs—.camera, .clothing, .equipment,
.guru, .holdings, .lighting, .singles, .ventures
and .voyage—for 60 days, when sunrise will
close and landrush, the period in which consumers can secure names for a higher price,
will open. After that, domain names become to prepare for gTLDs need to start thinking
generally available.
about which of their registered trademarks
should be defended in the sunrise periods,
which domain endings could add greatest
Before all hell breaks loose
value to the business and how gTLDs can be
Sunrise represents the first and best oppor- used to engage with online customers.”
tunity for trademark owners to secure their
brands in a new gTLD. To do so, they must On top of the TMCH, Donuts will be operating
have already registered their trademarks the Domain Protected Marks List (See TMCH
in ICANN’s Trademark Clearinghouse (see and DPML in a nutshell).
TMCH and DPML in a nutshell).
Launched in late September, the service is a
Speaking on a panel recently, Andy Churley, rights protection mechanism that is specific to
who is the chief marketing officer at Famous Donuts’s new gTLD registries. It allows tradeFour Media, which will be launching 12 new mark owners to have their TMCH-validated
gTLDs itself, said: “For the new gTLD pro- marks blocked from registration at the second
gramme to succeed, ICANN must ensure level in all of its new gTLDs, for one fee.
that the TMCH functions faultlessly and that
there is a critical mass of trademarks lodged At a reported initial cost of $3000, the
DPML is not cheap, but a blogger for doin the database.”
main name management company Com
“If this doesn’t happen, then sunrise periods Laude wrote on 18 October that the service
for registries are going to be pretty dire affairs may prove to be a cost-effective way for
and the scope for brand abuse, domaining some trademark owners to protect themand cybersquatting increases exponentially, selves against cybersquatters.
taking a long time to resolve which in turn
leads to increased litigation, and potentially, “The initial outlay is not cheap ... but if Donuts is awarded 200 of its 307 applications,
stalling the entire programme.”
the annual cost per block per registry will be
Anderson added: “With businesses starting to under $3.”
wakeup to the changing nature of the digital
world, we predict that more brands will devel- Speaking during a webinar in April, Com
op a defensive domain name strategy and the Laude managing director Nick Wood was
number of trademarks registered in the TMCH positive about Donuts launching the DMPL,
will rise by approximately 20,000 before the saying that it is a good example of a private
industry initiative to protect trademark owners
end of 2013.”
and build on the measures that registries have
“Those organisations that have not yet started to implement as a minimum. IPPro
TMCH and DPML in a nutshell
The Trademark Clearinghouse (TMCH) accepts nationally or regionally registered trademarks, but not state-registered marks.
Marks that are pending or were registered and later invalidated are ineligible, while common law trademarks will only be accepted if they have been validated in court.
Only identical matches to marks will be eligible for the TMCH and any special characters will be replaced with hyphens.
TMCH administrator Deloitte will verify trademarks as long as they are identical matches and all of the characters are in the same order as they appear in supporting documentation.
In the event that there is any doubt about the order in which they appear, the description provided by the trademark office will prevail.
Trademark owners will have to pay $150 to register a mark in the TMCH for one year. Three years will cost $435 and five will cost $725.
An advanced pricing model sees trademark owners and their agents receive discounts as they earn status points from registering or reviewing trademarks with the TMCH. As more
marks are registered or renewed, the cost of doing so will become cheaper.
To benefit from the Donuts Domain Protected Marks List (DPML), eligible marks must be validated in the TMCH with proof of use.
Applicants can choose to block, which lasts for five years but is renewable, an exact match or a term containing the exact match.
Blocked terms do not point to a website and anyone with a trademark exactly matching a blocked term can have the block removed for one or more registries at a later date.
A DPML block across all of the Donuts gTLDs will cost approximately $3000 for an initial five-year term.
12
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PeopleMoves
Industry appointments
A former associate at Fenwick & West LLP has patent litigation and counselled clients on US
joined the White House Office of Science and and international patent law issues.
Technology Policy.
Conner has experience handling patent issues
Colleen Chien joins as senior adviser to US relating to semiconductor manufacturing, hard
chief technology officer Todd Park on intellec- disk manufacturing, medical devices, rare
tual property and innovation.
earth magnets, digital cameras, optics, imaging and printing, wireless network protocols,
In her new role, Chien will advise Park on issues GUI interfaces, navigation systems, visual
related to IP and innovation, as well as privacy, search technology, online real-time auction
open government and civil liberties.
systems, interactive programming guides,
and software.
Chien helped to build patent portfolios for
Fenwick clients such as Symantec, as well as Prior to joining Dorsey, Conner was counsel at
providing counsel on the Fenwick team that Morrison & Foerster LLP in the firm’s Tokyo office.
represented Macromedia in its landmark $3.4
billion merger with Adobe Systems.
Before that he was an associate with Ropes &
Gray LLP in the firm’s New York, Palo Alto and
She has testified before US Congress on patent Tokyo offices.
issues and frequently lectures at national law
conferences and has published several in-depth Thomas Vitt, partner and co-chair of Dorsey’s
empirical studies, including of patent litigation, IP litigation practice group, said: “We are very
patent amicus briefs, compulsory licensing and pleased that Conner has joined Dorsey. He
patent-assertion entities (PAEs).
brings a wealth of experience and excellent
client relationships that will add to the firm’s
As a professor at Santa Clara University strong, multi-office IP litigation practice. We
School of Law, she focused her work on PAEs continue to strategically add talent in Minneand wrote papers, including Startups and Pat- apolis and across the Dorsey platform to better
ent Trolls and Patent Trolls by the Numbers, serve our clients around the world.”
which helped the government to focus its work
on PAE litigation.
Locke Lord LLP has hired Jerold Schnayer as
a partner to its IP litigation practice group.
Dorsey & Whitney LLP has hired Clinton
Conner to its IP practice group.
Schnayer joins the firm’s Chicago office from
Husch Blackwell LLP.
Clinton joins the Minneapolis office as counsel.
He practices patent, copyright, trademark and
Conner’s practice focuses on IP litigation with trade secret law, including prosecution, counan emphasis on patent litigation and patent en- selling, licensing and litigation matters. He has
forcement strategies.
been responsible for complex patent infringement,
copyright, trademark and trade secret litigation
He has represented Japan-based clients in US in the US and foreign countries.
13
Many of these litigations have involved high
technology electronic-, computer- and medicalrelated technology.
“Schnayer will be an extremely valuable addition to our already strong IP group,” said Jennifer Kenedy, managing partner of Locke Lord’s
Chicago office.
“IP litigation is a fast changing field of law and
one that reaches across the globe. His skill set
and experience will complement, build on and
further expand the high profile work we are doing for our clients here in the United States and
around the world.”
Prior to his position with Husch Blackwell,
Schnayer was a founding principal of Welsh
& Katz Ltd, and before that a partner at Fitch,
Even, Tabin, Flannery & Welsh.
Bracewell & Giuliani LLP has bolstered its IP litigation practice in New York.
The firm has added three lawyers specialising in
trademark and copyright protection.
Mark Mutterperl joins the firm as a partner from
Norton Rose Fulbright. The firm also hired Drew
Kastner and Jessica Parise as senior counsel.
Mutterperl focuses on brand protection and
IP issues. Specifically, he enforces trademark
rights against infringement, dilution and counterfeiting, and oversees counterfeiting and
other investigations.
“Today’s businesses are constantly battling to
protect their brands from counterfeiting as well
as infringement of trademarks, patents and
copyrights,” said Bracewell & Giuliani partner
Rudolph Giuliani.
www.ipprotheinternet.com
PeopleMoves
“The addition of Mutterperl, along with our current team of skilled litigators and former prosecutors, will be a strong asset to our clients in
fighting this battle and gives us an unparalleled
civil and criminal one-two punch.”
Doherty was formerly in-house trademark counsel at easyGroup where she was solely responsible for the prosecution and enforcement of the
easyGroup trademark portfolio that includes the
easyJet, easyCar and easyHotel trademarks,
working directly with Sir Stelios Haji-Ioannou.
Kastner focuses on trademark and copyright licensing and general IP matters, particularly in Niall Baker, partner and chief executive of Irwin
the areas of sports, entertainment, broadcast- Mitchell’s business legal service division, adding, and technology.
ed: “We are delighted and excited with these
new appointments and confident that each of
Parise helps her clients to enforce trademark them will play a key role in continuing the strong
rights against trademark and trade dress in- progress that BLS has made.”
fringement, dilution and counterfeiting.
“They are lawyers of the highest calibre and,
She also manages trademark portfolios, like all of our other recent hires, they share our
which includes consulting, implementing and vision and recognise the strong position we are
strategically planning for domestic and inter- in to take advantage of growth opportunities in
national trademark and domain name regis- the current legal market.”
tration and enforcement.
McAndrews, Held & Malloy has added three
Arent Fox LLP has nabbed patent litigator new associates to its IP roster.
Imran Khaliq from Dentons.
The company welcomed Dunstan Barnes,
Khaliq joins as partner in the firm’s San Michael Carrozza and Robert Kappers to its
Francisco office.
Chicago office on 3 October. All three joined as
clerks in 2011.
He has experience in the telecommunications,
technology and medical device sectors, and has They have gained experience in a wide range
represented brands in patent disputes involving of technological fields, and worked in numermobile devices, software, biotechnology and ous areas of IP law, including patent litigation,
medical devices, GPS technologies, semicon- prosecution, copyright and trademark litigation,
ductors, and internet-based technologies.
trade secrets, and transactional work.
“Khaliq has a great reputation for his knowledge
and experience when litigating high-stakes patent cases,” said Robert O’Brien, California managing partner at Arent Fox.
“Innovations in mobile medical apps are opening a
whole new window for medical technology and the
potential to provide healthcare delivery more quickly
and efficiently. Khaliq will provide Arent Fox clients
with another valuable resource in the Bay Area.”
Barnes focuses on material science and metallurgy. Carozza has experience with a wide range
of technologies, including both analogue and digital switching technologies, while Kappers specialises in chemical and bimolecular engineering.
“Over the last few years, these men have proved
to be essential assets to McAndrews, Held &
Malloy,” said firm president Robert Surrette.
“Their work, passion and dedication for the law
have demonstrated their commitment to one of
“Arent Fox’s intellectual property practice has our firm’s core values: superior client service.”
been recognised as exceptional, with a reputation for finding creative solutions to difficult chal- Carl van der Zandt has joined Hand Baldachin
lenges,” said Khaliq.
& Amburgey LLP as a partner.
“It is one of the few ‘go-to’ firms for novel and Zandt started on 1 October in the firm’s New
high-profile intellectual property issues and I am York office.
looking forward to collaborating with these very
He has experience representing a number of
talented colleagues.”
European enterprises with international busiIrwin Mitchell Solicitors has bolstered its IP ness interests, bridging legal, cultural and linpractice with a new patent attorney and a trade- guistic differences in connection with his clients’
cross-border activities.
mark attorney.
Alex Newman was head of IP at Squire Sanders LLP in the north of England. He will join
in November in the Leeds office along with
Kirsten Doherty, a UK and European trademark attorney formerly at Brown Rudnick.
Newman focuses on the technology and engineering sectors in particular, and advises clients
in relation to matters that relate to IP, ranging
from patent infringement and validity proceedings in the patents court.
Zandt was a founding and managing partner of
the New York law firm Gusy Van der Zandt LLP,
where he negotiated commercial and corporate
transactions between European enterprises
and US multinationals, including Boeing, IBM,
Nike, Xerox, and Microsoft.
At Hand Baldachin, he will focus his practice on
trans-Atlantic cross-border transactions and litigation, with an emphasis on supply chain-related
matters, IP, technology and creative industries.
14
“Zandt’s extensive legal knowledge and experience on both sides of the Atlantic, combined
with his keen business sense, will be a great
asset for the firm,” said managing partner
Alan Baldachin.
“In addition to having negotiated a range of
commercial and corporate transactions, his
experience with European cross-border litigation brings valuable strategic insights to the
table in connection to international business
disputes.” IPPro
Editor: Mark Dugdale
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+44 (0)20 8663 9620
Deputy editor: Georgina Lavers
[email protected]
Tel:
+44 (0)20 8663 9629
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[email protected]
Tel: +44 (0)20 8663 9620
Reporter: Jenna Jones
[email protected]
Tel:
+44 (0)20 8663 9622
Associate publisher: Carlos Northon
[email protected]
Tel:
+44 (0)20 8663 9623
Account manager: Wayne Edwards
[email protected]
Tel: +44 (0)20 8663 9625
Publisher: Justin Lawson
[email protected]
Tel:
+44 (0)20 8663 9628
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[email protected]
Designer: John Savage
[email protected]
Tel:
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